Oil & Gas Prices - June 7

[dan_s]

Opening Prices:
> WTI is down 23c to $69.39/Bbl, and Brent is down 25c to $71.64/Bbl.
The Trend remains UP and Buyers are in Control above $68.00.
Market Driven hedges are available at current prices. Only a weekly close below $63.60 derails the positive story.

> Natural gas is down 3.6c to $3.061/MMBtu.
The Trend is UP. Buyers are in Control above $3.08. A change in Trend requires a Friday close below $2.83.

AEGIS Notes
Oil

West Texas Intermediate touched $70/Bbl in overnight trading before paring back to around $69.50 Monday morning
The oil demand outlook remains constructive as 2.12 billion people globally have had at least one dose of COVID-19 vaccine, Our World in Data showed
BP sees a strong recovery in global crude demand and expects it to last for some time with U.S. tight oil production to remain in check (Bloomberg)

Russia’s oil & gas producer Rosneft warned of an “acute” shortfall in supply as global producers increasingly channel funds into a “hasty” energy transition (Reuters)
“The world risks a severe deficit of oil and gas,” Rosneft CEO Igor Sechin said at the St. Petersburg International Economic Forum
Sechin expects some shortages to kick in from the second half of 2021

BP expects strength in global oil demand to last, CEO says . Bloomberg
Energy giant BP Plc sees a strong recovery in global crude demand and expects it to last for some time, with U.S. shale production being kept in check, according to Chief Executive Officer Bernard Looney. “There is a lot of evidence that suggests that demand will be strong, and the shale seems to be remaining disciplined,” Looney told Bloomberg News in St. Petersburg, Russia. “I think that the situation we’re in at the moment could last like this for a while.”

Natural Gas

Prosperous differentials draw Western Canadian gas to the US Midwest (Platts)
> AECO’s spread to Chicago reached 30c on June 4, its widest since early-May
> A new gas processing facility is set to open at the end of summer, while local production is expected to decline. These factors will likely widen the differential further

South Korea’s biggest nuclear reactor will be shut for at least a month due to a fire, potentially raising LNG demand
> According to the Ministry of Trade, Industry, and Energy (MOTIE), the country will be ready to raise operating ratios of natural-gas-fired power plants to keep the electricity supply stable
> State-owned Korea Gas Corp.'s LNG sales jumped 22.4% Year-over-Year in April, which marked the biggest increase since April 2018, according to Platts

[dan_s]

On June 4 Reuters reported Asian spot prices for LNG rose for a second consecutive week and touched their highest since January, buoyed by higher oil prices and firm demand from China and Europe, industry sources said. The average LNG price for July delivery into Northeast Asia was estimated at about $10.95 MMBtu, up 65 cents from the previous week, they said. "LNG prices are expected to recover over the course of 2021 as vaccination rates improve and strict restrictions are gradually repealed," Fitch Solutions Country Risk and Industry Research, said in a note on Friday. Demand from China remains robust, with the country importing more than 7 million tonnes of LNG in May, a record for the month, as industrial activity picked up pace amid strong domestic demand. China's robust imports are expected to continue in June and July, continuing to boost prices, traders said.

[Fraser921]

Antero updated weekly liquids at 43.97 for the week and 39.95 for q2.. This is higher than q1 numbers!

https://d1io3yog0oux5.cloudfront.net/_b ... .21_v3.pdf

or go to antero investor page lower left if link doesnt work

[dan_s]

I am extremely bullish on NGL prices for 2H 2021 and 2022. Very few of our Sweet 16 and Small-Caps have hedged their NGLs.

Propane inventories are "dangerously low" and there is close to zero chance that the inventories can be increased to safe levels before the 2021-2022 winter.

I show each company's production mix at the bottom of their forecast/valuation models. AR, RRC, EQT, XEC, DVN and EOG sell a lot of NGLs.

[dan_s]

Closing Prices:
> WTI prompt month (JUL 21) was down $0.39 on the day, to settle at $69.23/Bbl.
> NG prompt month (JUL 21) was down $0.027 on the day, to settle at $3.070/MMBtu.

I do expect $70/bbl to be a strong resistance point, but oil is WAY AHEAD of the schedule already. If you have not done so already, I urge all of you to watch my June 6 podcast and focus on slide 9. If OPEC's new oil demand forecast is accurate, there will be very little excess oil production capacity remaining in the world by the end of this year. The last time OPEC spare production capacity got under 2 million BOPD, WTI went over $100/bbl. Hang tough.

I just got off our webinar with Tim Duncan, CEO of Talos Energy. We will publish an updated profile on the company by Wednesday and my valuation will be going up.